Andrea Terzi — A T-shirt model of savings, debt, and private spending

As long as the Euro area enforces balanced budget constraints at ALL levels of government, the Euro area will not be sustainable.

I have summarized here the argument behind the statement above.

What follows is a simple model that shows the logic of the argument.

Money And The Real Economy
A T-shirt model of savings, debt, and private spending
Andrea Terzi | Professor of Economics, Franklin College, Switzerland